10 U.S.C. § 3745: Required regulations

The Federal Acquisition Regulation shall contain provisions on the allowability of contractor costs. Such provisions shall define in detail and in specific terms those costs which are unallowable, in whole or in part, under covered contracts. Air shows. Membership in civic, community, and professional organizations. Recruitment. Employee morale and welfare. Actions to influence (directly or indirectly) executive branch action on regulatory and contract matters (other than costs incurred in regard to contract proposals pursuant to solicited or unsolicited bids). Community relations. Dining facilities. Professional and consulting services, including legal services. Compensation. Selling and marketing. Travel. Public relations. Hotel and meal expenses. Expense of corporate aircraft. Company-furnished automobiles. Advertising. Conventions. adequate documentation with respect to such costs; and the opinion of the contract auditor on the allowability of such costs. The Federal Acquisition Regulation shall provide that, to the maximum extent practicable, the contract auditor be present at any negotiation or meeting with the contractor regarding a determination of the allowability of indirect costs of the contractor. The Federal Acquisition Regulation shall require that all categories of costs designated in the report of the contract auditor as questioned with respect to a proposal for settlement be resolved in such a manner that the amount of the individual questioned costs that are paid will be reflected in the settlement.